Modeling interdependent participation incentives
Subtitle: dynamics of a voluntary livestock disease control program
By: Tong Wang and David A. Hennessy
Contributors: Hennessy, David A.; Iowa State University. Center for Agricultural and Rural Development
Series: Working paper -- 12-WP 527; Working paper (Iowa State University. Center for Agricultural and Rural Development) -- 12-WP 527.
Publisher: Center for Agricultural and Rural Development, Iowa State University
Published: 2011
Place of publication: Ames, Iowa
Language: eng
Number of pages: 50
Subjects: Livestock; Infections; Prevention
Other titles: Dynamics of a voluntary livestock disease control program
Description: This paper models producers' interdependent incentives to participate in a voluntary livestock disease control program. Under strategic complementarity among participation decisions, after a slow start momentum can build such that market premium for participation and participation rate increase sequentially. Non-participation, partial participation and full participation can all be Nash equilibria while participation cost heterogeneity will dispose the outcome toward incomplete participation. We find plausible conditions under which temporary government subsidies to the least cost-effective producers causes tipping toward full participation. Applying parameters from the literature on Johnes' disease, we illustrate factors that may affect participation. These include cost heterogeneity and program effectiveness.
Notes: "April 2012."

Author-supplied keywords: Incentives, livestock disease, momentum theorem, strategic complementarity, tipping, voluntary program.

Includes bibliographical references (p. 27-31).

Also available via the Internet at: http://www.card.iastate.edu/publications/dbs/pdffiles/12wp527.pdf